WTO decision in never ending saga
13th March 2012
IATA has released a report today that confirms what many lessors and industry expert have been working to, which is that air travel demand will not be back to 2019 levels until 2023, although this is usually reserved for short-haul travel. The recovery in international long-haul travel is widely expected to drag on longer into 2024-5. But indeed there are signs of optimism. The vaccinations programmes are being rolled out everywhere now with varying speeds admittedly but the prognosis is good that they are effective against new variants and so a fourth wave may be avoided.
Optimism levels are higher than they were among lessors. There are reports that the bun fight for new aircraft sale-leaseback deals with top tier credits is returning the market back to super lower lease rate factors – there will be outliers but the signs of the market tipping back to positive are there. But, as we have seen, air travel remains at the mercy of government rules and hopes for a good summer of travel are diminishing. “Lukewarm at best”, is how the expectation for summer travel was described to me this week. Airlines are struggling and it remains to be seen how many of those hanging on for summer would cope with “lukewarm” demand.
Optimism is relative to your jurisdiction of course. In the miserably cold and wet Spring in the UK, hopes for a summer holiday out of the cold are high albeit diminishing with every new Covid case reported in the press. In certain Asian countries, they are still grappling with the virus and vaccination take-up is low. Over in the US, the domestic market is rebounding nicely. Still, international travel remains the key to the recovery. IATA is right to call on governments for their critical support in reopening borders, creating travel corridors and getting back to flying responsibly.
The Airline Economics team is optimistic and is preparing for a reopening in time for its September events in Dublin and Dubai, and later in NYC and hopefully Hong Kong. Have you booked your place yet?